White adipose tissue (WAT) is a tissue specialized for the storage and mobilization of lipid energy. Chronic activation of WAT beta-adrenergic receptors by certain physiological and pharmacological conditions, however, transforms the tissue into one resembling brown fat, a thermogenic organ. Hallmarks of this tissue plasticity include transient inflammation followed by the appearance of multilocular adipocytes and massive mitochondria! biogenesis within these cells. Although the multilocular cells resemble brown adipocytes, histological and biochemical evidence indicates they are not newly-recruited brown fat cells, but rather represent a novel phenotype. These cells have greatly expanded capacity for lipid oxidation that appears to limit local inflammation induced by excessive fatty acid efflux. A significant fraction of the multilocular adipocytes appear to derive from mature fat cells through a novel proliferative pathway. These observations raise numerous fundamental questions regarding how the cellular plasticity takes place in WAT, and the function of the novel adipocyte phenotype. Multilocular adipocytes could represent a novel cellular target for anti-obesity and anti-diabetes therapeutics, and an understanding of the mechanisms controlling cellular plasticity in WAT could lead to novel points of therapeutic intervention for obesity and diabetes. Our specific aims are: 1) To examine the functional and mechanistic relationships between adipocyte oxidative capacity and adipose tissue inflammation. 2) To determine the origin and fate of multilocular white adipocytes. 3) To examine mechanisms by which Adrb3 activation induces mitochondrial biogenesis in white adipocytes in vivo.